Volkswagen Comeback Gains Traction

Kelley Blue Book (KBB) estimates that VW’s sales will rise 10.5% in June to 55,000, better than any other car company except Fiat Chrysler Automobiles N.V.

VW’s sales include its Audi and Porsche brands. Audi often beats Mercedes and BMW in growth rate among German manufacturers. In the US VW itself still relies on one very successful car to pull its overall sales higher — the much-awarded Golf. Sales of the line are often in the double digits per month. Golf family sales rose 252% in May to 6,308.

KBB analysts see success beyond June: “Volkswagen Group is another manufacturer poised to report solid growth, thanks to the full model lineup of its redesigned Golf. The Audi brand also is providing a boost with double-digit growth this year, while the overall luxury market is 7.4 percent higher than last year.”

The major contributor to the turnaround in the U.S. will be the Volkswagen Passenger Cars division, which forms around 16% of the company’s valuation and was a massive 46% contributor to the net revenues last year. The forecast is boosted by an 8% jump in deliveries in May. The Volkswagen group is estimated to achieve a 4.7% growth in the U.S. in June.

The strengthening dollar also bodes well for Volkswagen, which reports its financials in euros. Volkswagen is investing $7 billion in North America between 2014-2018 for the purpose of adding capacity and accelerating growth in the country. The German company might be geared for growth in the U.S. now with a new operating structure, well-performing premium auto brands, and with a turnaround in sales for the namesake passenger brands.

VW by some measures is the largest car company in the world. It has a market share of close to 25% in Europe, and it is among the market leaders in China, the leader in sales among all countries.